Streaming is all the rage, isn't it? Spotify just turned five. Last.fm is much older - it started in 2002. Google, Amazon and Apple all offer streaming services of sorts (though not all in the UK). And there are tons more streaming services to choose from; besides all the internet radio stations (including all the BBC's), there's Deezer, Rdio, Napster, 7Digital, 8tracks, Slacker, Wolfgang's Vault… it's a veritable cornucopia of music and information.

And yet if you go into many hi-fi shops and look for something that will deal natively with all this streaming, you'll probably go away stumped. That's part of why the hi-fi business is dying on its feet, argues Tom Cullen, co-founder of Sonos, which makes - ahem - hi-fi devices which handle streaming internet content. "Traditional stereo sales are falling by 25% year-on-year," Cullen says. "But that for wireless speakers is up 40%."

Overall, home audio is a $10bn (£6.2bn) business worldwide - but only $1.5bn is going on streaming devices. And that's where he sees an opportunity with the new Play:1 wireless speaker, which goes on sale from 2914 October. (It's announced on 14 October.)

Play One, play all

It's a surprisingly small speaker, about the size of a kilogram bag of sugar. But it packs a punch. I've got a pair of Bose active speakers which are about the same size, and cost only slightly less than the £169 that the Play 1 goes for.

Exploded view of the Sonos Play:1 speaker: the company says it has worked out how to give its speaker cone twice the travel as conventional systems, yielding greater sound output. Photograph: Sonos/PR

The Play 1 definitely outmuscles my Bose speakers for sound quality: the bass is clear, but the treble is distinct too. Of course there's only one Play 1 for the price, compared to the two Bose speakers. But the Play 1 will fill a room easily: Cullen says that the company's engineers have figured out how to give the speaker cone twice as much travel within a limited space - which means you can move more air, and so have a louder speaker in a smaller package.

Setup is easy: you plug the Play:1 in and press a button on the free controller app, or on the Bridge (a £39 box which connects to your router; offered free until January with Play:1 purchases) to link it up. Once you've done that, the Sonos devices all connect wirelessly; the only wires you'll need are the power lead. It saves a lot of time on the floor following wires around.

If you have multiple Sonos devices, you can group them together to play the same music in different rooms.

All this can be controlled through free smartphone apps for iPhone, iPad or Android - Windows Phone users will have to either use Phonos, a third-party app, or just get a super-cheap Android tablet and use that (a Tesco Hudl, for example, would be cheaper than Sonos's dedicated controller (which it doesn't even show on its online store anymore).

Life in stereo

Two Sonos Play:1 speakers being used as a rear stereo pair as part of a full 5.1 home stereo system with a PlayBar (beneath TV) and Sub (on R). Photograph: /PR

You can also, if you're flush, buy two Play:1s and set them up as a stereo pair. In my testing with two Sonos pre-production units, I had a little trouble with this; it turned out one of the units needed a factory reset for its software. Just in case you ever need to do this, here's how: while the device is turned on, hold down the "Play/Pause" button; unplug the device, still holding the button, and then plug it back in, and keep holding the button down until the light on the top begins flashing white/amber. Then let go until it stops. Then it's ready for a software update to match the rest of the system.

As a stereo pair, the Play:1 does a great job. Certainly, you could buy stereo speakers for less (though you'd need an amp as well, and then to connect your computer or streaming system to that amp), but you couldn't get speakers which you can then split up and put into different rooms in your living space to stream different music. At this price, you've got flexibility for parties and so on.

Pause for effect

Previous Sonos devices have a "Mute" button on the top of the device, and a louder/quieter volume rocker. As of the Play 1, and the software update that comes with it, the "Mute" button becomes a "Play/Pause" button: press it, and the music is buffered locally. (I tried it on Last.fm and was able to buffer the music for some minutes. However on BBC radio, it's not effective; the "pause" is actually just a mute, and you rejoin the stream at the point it's actually playing.)

What, Tyler?

So who is the Play:1 for? Cullen argues it's a speaker for "Tyler" - Sonos's internal shorthand for the young men who were twentysomethings when the company set up in 2002. They were digital natives, used to getting their content for free from the first, illicit version of Napster; but the problem for the company was that "Tyler" then couldn't really afford its stuff. So he listened to low-quality audio grabbed off the net on low-quality speakers. (Instead it focussed on the other members of its imagined demographic: Don, a 40-year-old bachelor; the Hucknall family of four; and Bob and Sarah, a DINKY (dual income, no kids yet) couple in their 30s. Plus, of course, Tyler.

Now Tyler is all grown up, and Sonos has also come to meet him halfway. Indeed, you could say that the Play 1 is also aimed at all Tyler's twentysomething replacements, who might want to find out what good quality audio sounds like to go along with the expensive headphones they're buying for when they're out and about.

Sonos claims to be installed in "more than three million rooms". Its popularity goes well beyond homes; I saw two Play:3s being used to pipe music around a clothes shop in Paris recently.

But the Play:1's combination of great sound, streaming connectivity and comparatively low price makes me think it will be a hit.

Conclusion

When reviewing the Sonos Playbar - its rather pricier soundbar to enhance your TV output - in March, I observed that the Californian company's reputation for pricey products means "you're not going to find it in Poundland any time soon". Yet it's edging closer.

Considering Sonos's offerings, you can now get two Play:1s for less than the price of one of its earlier products, the £399 Connect:Amp (which offers a power amp to drive standard hi-fi speakers); a pair is nearly less even than a single Play:5 (£349), the top end of its standalone wireless speaker range. It's hard to see how, if you're after quality but on a budget, the Play:1 isn't a bargain.

Sonos certainly hopes so; Cullen said that it has been ramping up production for some time ahead of the expected interest. I've been impressed with Sonos's approach ever since first seeing its products in May 2006. With streaming on the rise, its time has finally arrived. Even while traditional hi-fi might be fading away, wireless speakers have a bright future.

Wrapup

Sonos Play:1 £169 from http://www.sonos.com/shop/ or hi-fi dealers; until January, purchases will also offer free Bridge to provide internet connection. Aluminium grille; available in white or black trimming.

Pros: great sound, easy to control, portable, connects to multiple streaming services including Spotify, Last.fm, internet radio (subscription may be needed), easy setup, minimal wiring (power lead is all you need); free Bridge until January

Cons: no Windows Phone controller app (yet).Updated with correct details about sale date for Play:1, and price of Play:5.